Surely, $31 Trillion Is Enough Debt

From Mr. Kudlow’s broadcast on Fox Business News:

Surely, $31 Trillion Is Enough Debt

The president does get the bragging rights to more than $6 trillion of spending and borrowing — even though he never mentions it.

By: Lawrence Kudlow,  January 25, 2023:

So, to begin: Save America. Stop the spending.

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House Republicans are on this quest, doing the lord’s work in the effort to reduce inflationary federal spending as the price to pay for an increase in the debt ceiling. Surely, $31 trillion of debt is enough. Federal spending under President Biden is now at 24 percent of GDP, almost a quarter of our economy. Isn’t that enough?

Spending by federal, state, and local governments is 44 percent of GDP. Almost half the economy — run by the government. That’s nothing if not big-government socialism.

Mr. Biden and his Democrats will do anything and say anything to avoid spending reductions. So, here’s the president again on the hustings with the “big lie” about Republicans: “They want to cut your Social Security, Medicare. Now, this is the God’s truth. It’s almost unbelievable. And beyond that, they’re actually threatening to have us default on the American debt.”

Mr. Biden keeps saying this. So do the Senate majority leader, Charles Schumer, and the House minority leader, Hakeem Jefferies. It is completely untrue.

Just ask Speaker McCarthy. “None of that is true” is what he replied after I said to him: “They’re saying you’re going to cut Social Security, you’re going to cut Medicare, and you’re going to default on the interest payments on the bonds.”

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I ask again, could Mr. McCarthy be any clearer?

The the point is: Mr. Biden and the Democrats will say anything. Frankly, it goes beyond cognitive dissonance — it’s just the kind of Big Lie that authoritarians or totalitarians have used forever to attempt to turn a lie into the truth through repetition. It’s a very sad state of affairs on their part.

Now, Mr. Biden is out there today praising the GDP economic report for the fourth quarter. Well, if I were you, I wouldn’t, Mr. President. First, for the entire year, 2022 real GDP increased by a miniscule 1 percent. It’s the smallest rise since the financial meltdown in 2008-09.

I’m measuring, as economists do, fourth quarter over fourth quarter. Like any business, year-end to year-end. On the same basis, the inflation rate registered 6.3 percent, the highest in 40 years.

Essentially, the skyrocketing inflation was caused principally by Mr. Biden’s $2 trillion so-called Rescue Act in March 2021, plus an unnecessary trillion-dollar Green New Deal infrastructure bill, plus an equally unnecessary Intel Corporation bailout, plus another Green New Deal bailout totaling nearly $800 billion, plus the monstrosity that was the $1.7 trillion omnibus bill.

So, we’re talking more than $6 trillion of spending and borrowing.

Mr. Biden gets the bragging rights to that — even though he never mentions it. The people paying for his woke central-planning government policies are essentially the middle class and others lower on the income scale.

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Today, Mr. Biden was trying to brag that real wages are going up. Well, the reality is real wages for typical families have fallen 21 consecutive months, when properly measured on a 12-month, year-on-year basis — ever since his first so-called rescue plan in 2021.

In just the past year, in the December employment report, average hourly earnings for all employees increased 4.6 percent for the past 12 months.

Meanwhile, consumer prices in December increased 6.5 percent for the past 12 months. Because 6.5 is higher than 4.6, Mr. Biden’s arithmetic is, shall we say, questionable.

Finally, if you look under the hood of today’s GDP report, the basic core economy — which is consumer spending and business investment, C+I — was basically flat. All of the strength in the 2.9 percent number came from a huge inventory buildup, which will be reversed in the next quarter or two.

So, I must say, unfortunately the economic outlook appears to be negative GDP for the next quarter or two. Save America. Stop the spending. And, for heaven’s sake, tell the truth.